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Secret to More Profitable Negotiations: Food

New research shows that simply sharing a meal with negotiating partners can lead to better deals.
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When you have important business to discuss, dining out offers many advantages, from putting the parties on equal footing to creating a captive audience for your pitch, all of which Kevin Daum recently laid out here on Inc. But while breaking bread together may be a great bonding ritual in many areas of business, it seems it might be particularly profitable in negotiations.    

That's the finding of new research conduced by Lakshmi Balachandra, a professor of entrepreneurship at Babson College, who reported her findings recently on the HBR Blog Network.

To test the effect of sharing a meal on the outcome of negotiations, Balachandra put 132 MBA students into small groups and asked them to hammer out a complex joint venture agreement between two companies. The exercise was structured such that negotiating partners had to think collaboratively and make trade-offs to create a maximally profitable deal.

What did Balachandra discover? In short, if you're about to negotiate an important deal for your business, make sure you keep your local restaurant or takeout guide handy. She explains:

The students who ate together while negotiating — either at a restaurant or over food brought into a business conference room — created significantly increased profits compared to those who negotiated without dining. (Individuals who negotiated in restaurants created 12% greater profits and those who negotiated over food in a conference room created 11% greater profits.) This suggests that eating while deciding important matters offers profitable, measurable benefits through mutually productive discussions.

She also tested whether other shared activities such as completing a puzzle together improved the profitability of the deal. They did not. So what's so special about eating together? Biology may be the best explanation, according to Balachandra.

"When the negotiators in my first two studies ate, they immediately increased their glucose levels. Research has shown that the consumption of glucose enhances complex brain activities, bolstering self-control and regulating prejudice and aggressive behaviors," she writes, while also speculating that seeing and unconsciously mimicking your dining partner may engender more positive feelings towards them.

Whatever the underlying reason for the effect, the takeaway for entrepreneurs is tasty and easily put to use. If you have a high stakes negotiation coming up, use your stomach not just your brain.

Do you find negotiations go more smoothly over a meal?

 

IMAGE: Getty
Last updated: Jan 31, 2013

JESSICA STILLMAN

Jessica Stillman is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist.




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